Climate change puts world at 'tipping point'

Climate change is not a steady process. It entails "Tipping Points", which – if reached – cause devastating environmental, societal and economic changes. A report by WWF and Allianz focuses on regions and phenomena most likely to be affected in the first half of the century.

Current discussions consider global warming a process similar to a steady flow of water in our bathrooms and kitchens, where temperature goes up gradually, controlled by a turn of the tap. But the Major Tipping Points in the Earth's Climate System and Consequences for the Insurance Sector states that warming of global temperatures is likely to take a much more unpredictable turn – one that could cost the world hundreds of billions.

If action is not taken immediately, sea level rise on the East Coast of the USA, the shift to an arid climate in California, disturbances of the Indian Summer Monsoon in India and Nepal or the dieback of the Amazon rainforest due to increasing drought, are likely to affect hundreds millions of people and cost hundreds of billions.

The study explores impacts of these "tipping points," including their economic consequences and implications for the insurance sector. It also shows how close the world is to reaching "tipping points" in many regions of the world, or rises in temperature that will tip the scales toward disaster.

Climate change will happen in a devastating way

"If we don't take action against climate change, it will happen in a disruptive and devastating way," said Kim Carstensen, the Head of WWF Global Climate Initiative. "Reaching a tipping point means losing something forever. I don't think anyone likes the idea of losing anything forever."

According to the report, carried out by the Tyndall Centre, the impacts of passing "Tipping Points" on the livelihood of people and economic assets have been underestimated so far. The report therefore focuses on regions and phenomena where such events might be expected to cause significant impacts within the first half of the century.

"We must prepare our clients"

"As an insurer and investor, we must prepare our clients for these scenarios as long as we still have leeway for action," says Clemens von Weichs, CEO of Allianz Reinsurance. "Setting premiums risk-appropriately and sustainably is of vital interest to everyone involved, because this is the only way to ensure that coverage solutions will continue to exist."

Allianz intends to address climate change by entering into dialogue with its clients at an early date. This will allow it to point out countermeasures in a timely way, and work together to develop specific coverage concepts, whether for existing assets or for future climate-compatible projects like alternative energy and water supply concepts, dyke construction, or protection against failed harvests.

"Why insurers care"

Video statement by Olaf Novak (Allianz)

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